Equity futures look to be fading into the night and important levels to have been breached: S&P 4400, QQQ 350, AMD 100. It is important to understand the controlling narrative of the market: Energy/commodities/resources need to peak and China’s supply chain issues need to settle before the bond market can stop free-falling.
- Expect more heightened volatility, BUT…
- There is a greater chance of the fed becoming incrementally more dovish in 6-9 months rather than incrementally more hawkish. (A positive for equities)
- Fundamentals were always just a narrative. Price action matters most.
- Fresh relative lows for Microsoft and Nvidia. Most people are panicking. An opportunity there.
- Sentiment is at multi-decade lows (way too low), and the AAII bullishness sentiment survey is at the lowest level since 1992 here.
This chart has been up since January.
Gold is still strong
GSG is coming back for vengeance
We were bullish GSG last week (+6%) in weak markets
AAII survey bullishness declined to the lowest level (15.8%) since 1992. 12m forward returns are typically+++
Return always wants its risk payment. Not Investment Advice.
